Life after Beckett

Robert Parker's scoring of the 2008's hitting the wires now. And by wires, I mean tasting notes from the subscriber's section of the Wine Advocate website. When these wines were in their barrels back in 2008, Parker had given a score range, like (91-93). Now that they are in bottles, he is giving a number.
In Wall Street lingo, here I go:

Lynch Bages hit the top end of estimates
Calon Segur hit the low end of estimates
Cos d'Estournel missed completely. 92+ vs (94-96+)
D'Armailhac inline
Pontet Canet low
Lafite low
Pichon Lalande missed. 92 vs (94-96)
Palmer missed 94 vs (95-97)
Mouton low
Margaux missed 94 vs (95-97)
Haut Brion inline
Latour missed 95+ vs (96-98) 
Talbot inline
Leoville Las Cases low 93+ vs (95-97+)
Grand Puy Lacoste low

 All of this inline with my expectations, not because I can particularly tell a 92 from a 96 but because I was pretty sure Parker had to calm down the '08's in order to make room for another vintage of the century, the 2010's. His initial ranges of the 2008's had been released during the financial crisis. It may have been up to him to save the fine wine industry at the time. Now the fine wine industry doesn't need any more saving, except perhaps from itself. Beyond the massive headline touting the 2010 vintage, Parker's commentary urges caution with respect to wine investment, including the possibility of serious trouble if current prices are the result of market manipulation being coordinated by the major chateaux.

Where Fortunes are Made

Let your heart be your guide. The other side already says that. How about some lotto numbers?

New Orleans Bachelor Party (last weekend)

We cleaned out the entire minibar on American Airlines but not before some old guy insisted on giving me a syllabus:

Some of us went rogue and discovered the sandwich of everlasting life: 

(Yes, that's bacon between the cheese and fried oysters.)

 When twelve dudes redecorate the kitchen...

(Did the owner (aka douchebag) give us an security deposit credit for improvement to leasehold?)

Pullman wine bar, Montreal

Nice ambiance, good food and wines by the glass selection, friendly staff, owner seemed like a bit of a douchebag.

Montreal

The rules governing the protection of the French language are true:

I've also discovered where the world's finest wine hails from:

Leaving the Middle Kingdom

I had previously talked about how the number 8 is lucky for Chinese people because it phonetically sounds like the word for getting rich. Similarly, the number 4 is unlucky because it sounds like “death.” Moreover, “14” is even worse because it sounds like “must die.” In areas where there’s a high concentration of Chinese people – like casinos, and well, China – buildings have a 13^th floor but not a 14^th floor.

When my Business Class upgrade came through, I decided to go with the strategy that selecting a seat in Row 14 would minimize the probability of having an annoying middle-aged Chinese dude as a neighbor – the kind that takes every newspaper at boarding, and proceeds to turn the pages into your airspace, occasionally knocking over your beverage. The strategy failed. That’s exactly who I got.

I washed some NyQuil down with Crozes-Hermitage and tried unsuccessfully to fall asleep. Can’t wait to blow out the rest of my frequent flyer miles and never fly United again. 

Cultural Inefficiencies and Arbitrage

This weekend is the Christie's wine auction in Hong Kong. Like every other auction I've been to, this one is also at the Mandarin Oriental. I consider going. I could hang out at registration and flirt with some of the Ivy League Art History majors behind the desk. But this variety of potential mates seems hard to come by in Hong Kong these days. In pandering to the Mainland clientele, auction house meeters-and-greeters have become mostly attractive Mandarin-and-Cantonese-speaking women. They are courteous and cordial, and do their jobs very well. From afar, we exchange smiles and glances sometimes, especially when the Echezeaux is served in between lots. But it has to remain that way. And our emails to each other will always be signed "Kind Regards." The problem is mine. They speak English very well, but their residual Chinese accents are too much for me to handle. Any question or remark, no matter how witty or charming, can only remind me of every nagging relative I have on this planet.

 Sure, I can improve my own Cantonese or Mandarin. But instead I find myself eating a pie and watching the Christie's auction online. One of the two consignors is the Vintage Wine Fund, which, as its name implies, is a wine hedge fund. They publish a monthly research note that I find to be very intelligent. So, I wonder who's decision it was to blast out 14 sequential lots of 1996 Mouton in the opening minutes of the auction. Hadn't anyone learned anything from how this style of dumpage played out in Andrew Lloyd Webber's Don't Cry for Me, Twenty Cases Lafite and Latour? Somewhere in that undisclosed seller's commission and 20% buyer's premium, wasn't the auction house supposed to have hired someone to read the news about this sort of thing? The answer is, they probably did.

But go to any newspaper or online publication and all you'll ever see is how well the auction went and how strong the wine market is. The key headline numbers include the whopping total sales, the percentage of lots sold, and the percentage of lots that fetched above estimates. Most of these numbers mean nothing, or rather, they mean about as much as the official unemployment rate disseminated by the Chinese government. The quotes are also, always the same. Read one auction article and you've read them all.  "9 out of the top 10 lots were purchased by unidentified Asian buyers." This supports the idea that if you invest in wine now, some maniacal Chinese guy will pay you more for it later. Nobody has an incentive to speak or write in an otherwise manner.

What's more interesting to me is when there are tables of Chinese people at the Mandarin Oriental, who, rather than engaging in peacock bidding wars, are quietly enjoying the free lunch and wine.  But of course, this won't be written about. And to me, that's fine. It's exactly how I extend my phantom life.

When I first initiated my position on the 1996 Mouton, I knew I was getting into "Cultural Arbitrage." In a previous post, I had mentioned that the price of the 2008 Mouton had more than doubled on rumors that a Chinese artist would be commissioned for the label. The 1996 is the only other Mouton with a label drawn by a Chinese artist. In December, I noticed that the supply of the 1996 on the market was small. It was also priced significantly lower than the 2008. So I bought some. Did I actually believe that the newly rich Mainland Chinese were lining up for bottles of fine wine  because of a Chinese label on it? Of course not. Would Louis Vuitton bags be such a hit if they suddenly replaced "LV" with "Made in China" all across the design?

Bubbles often occur when there's a great investment sales pitch that people can jump on without feeling guilty about not doing any homework. Example: "The Internet is going to change the world. Nobody knows what the proper valuation is, but if you don't invest now, you'll miss out." This type of lazy investing is similarly receptive to the opaqueness of China: "the demand of a billion new people coming into the market!" The wine community is one that very much enjoys not doing any homework. Add to it Cultural Arbitrage - the smirk on an American, British, or Hong Konger's face at the thought of some goofy Chinese general's son wearing socks with sandals, paying indiscriminately for a brand name - and a trading opportunity is born. The bet is not on the reality, but on the perception of reality: my perception of other people's perceptions, and my small, evil role in supporting it: "Alistair, I'll buy everything you have at that price, but do me a favor, if anyone asks who the buyer was, just say it was a Chinese guy."

Eighteen hours prior to the start of the Christie's auction, I sell out a big chunk of my 1996 Mouton position. If prices are low when the hammer falls in the roomful of actual Chinese people - as opposed to imagined ones - then I can suspect I was right.

Ironically, this auction itself is an example of how the Internet has indeed changed the world. You can now virtually stream into the Mandarin Oriental and make online bids against the crowd. All of this, when the auction gets underway, informs me in real-time that my cultural cynicism has made me into a very good wine trader. But the composite score of my awesomeness remains tragically limited by my inability to flirt with desirable auction house women who speak with a Chinese accent. So I guess we'll have to call this weekend a draw. Next up on the season's schedule, is Sotheby's in April. Maybe they'll have an online chatroom.